When sellers are choosers: Ready for interview?

Amir Efrati, The Wall Street JournalCHICAGO TRIBUNE

Within a month of putting her two-bedroom house in San Francisco on the market, owner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.

Two weeks later, she and the buyer hammered out a contract that included feeding the backyard wildlife, which Gao has done three times a week for the past two years. "I don't think it matters if it's a buyer's market or a seller's market," Gao says. "Anyone with a good heart would feed them."

In this booming real estate market, prospective home buyers are encountering some unorthodox requests. As sellers are barraged by eager bidders, they're seeking not only the highest price or wrangling over who'll pick up taxes and closing costs -- but some also are asking to stay in the house months after the deal closes, or requesting fixtures that typically stay with the property, such as refrigerators and diving boards. In Tempe, Ariz., one seller invited bidders to sit for interviews until he found one he thought his neighbors would like. A homeowner in San Antonio was happy to let her house go, but only to a buyer who promised not to renovate it.

"As a buyer you have no leverage in this market," says Bruce Ross Bernor, an agent in San Francisco.

Sellers' unusual demands are another manifestation of the current hot housing market. Inflation-adjusted home sale prices increased at least 30 percent in the last three years in 55 metro areas, according to the Federal Deposit Insurance Corp., while the number of houses for sale remains low, particularly in hot markets such as Palm Beach and San Francisco.

Home buyer Allison Love figured the process wouldn't be about being able participate in neighborhood watches. "The last thing I expected was to be interviewed for a home," says Love, a 32-year-old elementary school teacher. "You're at the seller's mercy."

The sellers, Robert Mode and his wife, Lisa, say that because they had more than one bidder, they could afford to weigh factors besides the final price. Mode, a 42-year-old salesman, says he wanted to be a good neighbor to the end, leaving his home of six years in good hands.

"We'd have a neighborhood cookout every six months. Sometimes, I'd be mowing my lawn, and people I never met before would wave. It made you feel like you were part of something bigger than yourself," he says. "I had a moral responsibility to my neighbors to pick the best buyer."

The Modes accepted Love's offer, which was $6,100 above the asking price but $2,000 below the highest bid.

In many cases, there's a fine line between picky and discriminatory. A seller who interviews a buyer must follow roughly the same rules as an employer who interviews a job candidate, says Beverly Watts, director of the National Fair Housing Training Academy, which trains state and local agencies on how to investigate fair-housing violations. Sellers cannot refuse to sell (or show a property) to someone based on race, religion, disability or other classes protected by federal laws. Some cities and states have laws to protect against age or sexual-orientation discrimination.

That's why brokers often discourage communication between seller and prospective buyer. Home sales already are high-stakes negotiations, and personal communication can add a whole new menu of snags.

"Sometimes the simplest thing said between the buyer and seller before the contract is signed can blow the deal," says Dick Leike, president of Memphis, Tenn.-based brokerage firm Crye-Leike.

Claire Golden was willing to take the risk. She didn't care who the potential buyers were -- but she did want to know what they planned to do with her house. The San Antonio retiree lived in a modern cedar-and-glass 3-bedroom she and her late husband built in 1959, and she wanted a buyer that would keep it the way she left it.

"It was an emotional tie," she said. "I just didn't want the house changed."

The first couple Golden interviewed last summer offered the asking price, in the high six figures, and said they wouldn't do any major renovation. A second couple made a higher offer, but had five boys and wanted to convert the home's study into a bedroom. "Right away I was turned off," Golden says. "This house would not accommodate five boys comfortably without doing major changes." The lower offer prevailed.

There's always been some give and take between buyers and sellers, depending on the market conditions and peculiarities of each deal. But the latest seller-driven market marks a change from even as recently as four years ago. After Sept. 11, 2001, for example, some sellers eager to unload properties were throwing in extras to help close the deal -- including convertibles, art or recommendations for the local country club.

Some buyers aren't eager to give ground. After Lisa Lai Fook offered the $499,000 asking price for a town house in Oakland, Calif., last month, the seller asked her to write a letter describing her background. Lai Fook walked away.

"I'm really busy," says the 33-year-old chemical engineer. "To sit there and write a letter to someone I don't know after I've put down a ridiculous sum of money is insulting."

Not every seller's demand is necessarily honored. Terms of sale meant to remain in effect after the deal has closed must be written into the contract and transferred to the property's deed, says Neil B. Garfinkel, a New York real-estate lawyer. In the case of Gao's squirrels, the feeding clause in the contract wasn't transferred to the deed. Even if it had been, Garfinkel says enforcement would be tricky. "It would be impossible to monitor that," he says.

Indeed, when Susan Butler was negotiating to buy Gao's San Francisco property, she was resigned to the feeding schedule.

"At that point, I said, `Yeah, ... I'll feed the squirrels,'" she said.

She signed a contract in April, paying $815,000 -- or $116,000 over the asking price.

Will Butler actually feed her new furry friends? "Probably not," says the college administrator. "I don't want to encourage other rodents."